Question

The Lundberg Survey, which reports gas prices at gas stations nationwide, reported recently that the average price for regular grade gasoline in the US was $ 3.42 per gallon (source: moneynews.com). You believe that the current average price for the population of stations in your city is higher. To make your case, you take a random sample of 49 stations in your city and find that the average regular gas price for the stations in the sample is $ 3.46 per gallon. Is this sufficient sample evidence to reject a null hypothesis that the average price of gasoline for the population of gas stations in your city is no more than $ 3.42, at the 5% significance level? Assume the standard deviation of gas prices for the population of gas stations in your city is $.14 per gallon.